Despite the fact that financial information is more accessible than ever before, there are still many misconceptions about estate planning. By working with an experienced estate planning attorney, you can avoid the following common estate planning mistakes.
Not Having an Estate Plan
Today, as many as 64 percent of Americans don’t have a will — a basic estate planning tool that establishes how your assets will be distributed after you die. Additionally, a will is the only way to name guardians for your minor children if you die. By failing to create a will, the courts will intervene to make these decisions in accordance with applicable state probate laws, which may not agree with your wishes.
Failing to Update a Will
If you have created a will, this is not a “once and done” matter because it will need to be updated from time to time to reflect the changes that have taken place during your lifetime — marriage, having children, retirement, divorce, remarriage, and so on. While each situation is unique, a good practice is to have an attorney review your will every two years.
Not Planning for Disability
Although sustaining an illness or an injury is the furthest thing from our minds, experiencing an unexpected long-term disability can disrupt your financial and personal affairs. Therefore, it is crucial to create the necessary powers of attorney.
First, a durable power of attorney allows you to name a trusted person (e.g. a spouse, close relative, or good friend), to manage your financial affairs — debts, bank, investment accounts, or property — if you become incapacitated. In addition, a power of attorney for healthcare, often referred to as an advance medical directive or healthcare proxy, allows you to designate someone to make decisions about the type of healthcare you should receive, according to your preferences, if you cannot speak for yourself.
Selecting the Wrong Person as Executor
It is common to name a close relative or trusted friend as the executor, but this may not always be the best choice. Your executor must be capable, trustworthy, and have a basic understanding of finances and the assets in your estate. By choosing someone who may not be qualified, your will could be contested in court, which can be an unnecessary emotional and financial burden for your heirs.
Naming Incapable Heirs
While we like to believe that our loved ones are capable of managing an inheritance, some beneficiaries may not understand finances or are irresponsible. In these circumstances, a will can designate a professional to supervise these assets, or a “spendthrift trust” can be put in place.
Contact an Experienced Illinois Estate Planning Attorney Today
Ultimately, estate planning is more than just getting your affairs in order, it’s about planning for your future. The surest way to avoid these common estate planning mistakes is to have proper legal representation. Contact us today to learn more about the importance of a well planned estate.